Republicans were joyful Friday as they finalized their tax plan, bridging differences between the House and Senate bills and moving another step closer to getting legislation to President Donald Trump by Christmas.
Republicans also appear to, at least for now, have locked down the votes they need to pass the measure through the House and Senate, after holdout Sens. Marco Rubio, R-Fla., and Bob Corker, R-Tenn., pledged their support.
Overall, the "Tax Cut and Jobs Act" is the largest one-time reduction in the corporate tax rate in American history: from 35 percent down to 21. The bill also lowers taxes for the vast majority of Americans and small business owners — at least until the cuts expire after 8 years.
Last-minute changes to the GOP's big plan gave a larger tax break to the wealthy and preserved certain tax savings for the middle class, including the student loan interest deduction, the deduction for excessive medical expenses, and the tax break for graduate students. A change made Friday morning to win over Rubio expands the child tax credit even further to give more money to working-class families.
Here's a rundown of what's in the final bill. (If you want to read all 505 pages, click here.)
WHAT IS CHANGING
A new tax cut for the rich: The final plan lowers the top tax rate for top earners. Under current law, the highest rate is 39.6 percent for married couples earning over $470,700. The GOP bill would drop that to 37 percent and raise the threshold at which that top rate kicks in, to $500,000 for individuals and $600,000 for married couples. This amounts to a significant tax break for the very wealthy, a departure from repeated claims by Trump and his top officials that the bill would not cut taxes on the rich. The new tax break for millionaires goes beyond what was in the original House and Senate bills, with Republicans seeking to ensure wealthy earners in states such as New York, Connecticut and California don't end up paying substantially higher taxes as a result of the bill.
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